CDOs dominate Taiwanese ABS activity

Following the path set by Chinatrust Commercial Bank's NT$18 billion (US$536.8 million) offering designed by UBS in September, two more CDO deals have been completed in recent weeks, with more to follow.

In order to enhance returns, UBS devised a structure packaging the NT$-denominated structured bonds, consisting mainly of inverse floaters, with triple-A rated US-dollar denominated zero coupon bonds. The idea was to combine the two into a fixed security, issued as a domestic CDO.

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